Kaito AI Founder's X Account Hacked in Attempt to Manipulate Crypto Market

On March 15, Kaito AI founder Yu Hu's official X account was hacked in a seemingly coordinated attempt to manipulate the cryptocurrency market. Kaito AI, an artificial intelligence-based research platform focused on cryptocurrencies, was not directly compromised, but the attack spread misinformation that caused the KAITO token to plummet in a short time. How the attack took place The hacker gained control of both Yu Hu's personal X account and the official Kaito AI account. Using these accounts, they falsely claimed that Kaito AI's wallet had been compromised, warning users that their funds were at risk. The alarming messages led to a panic sell-off among investors, causing the KAITO token to plummet by 13%. Although the misleading posts were eventually removed, the damage was done. Market confidence fluctuated and trading activity soared more than 80% as investors scrambled to react. By Saturday, KAITO's price was stable at $1.40, but the temporary drop highlighted the vulnerability of market fluctuations driven by social media. Possible market manipulation strategies DeFi industry analyst Warhol believes the attack was not random but a calculated financial move. He suggested that the perpetrators may have shorted the KAITO token before publishing the false information. This strategy, known as "short selling and distortion," involves spreading negative news to trigger a price drop, allowing attackers to profit from their short positions. Kaito AI's response and security assurance After the incident, Kaito AI was quick to reassure the community that the hack only affected X accounts and did not affect the platform's infrastructure, crypto wallets, or user funds. Yu Hu emphasized: "Nothing related to KAITO was hacked—no supply, no wallet. Only my account X and account X of Kaito were compromised. Then the hackers spread misinformation." Kaito's AI research partner Sandra Leow points out that the attack was strategically timed during Yu Hu's inactive hours, suggesting it was a deliberate attempt to cause maximum damage. Since then, the company has regained control of the accounts and reaffirmed that its platform remains secure. Cyber threats rise in the cryptocurrency sector This incident highlights the rise of cyber threats in the crypto space. Social media remains a powerful tool for influencing investor sentiment, and bad actors are constantly looking to exploit it for financial gain. As Kaito AI advances, the event serves as a reminder for both the company and investors to remain vigilant. Advanced security measures, including two-factor authentication and advanced monitoring systems, play an important role in protecting digital assets and reputations in the growing cryptocurrency landscape.